Brokers, bankers, and blokes

I consider it an honor and a privilege to get the opportunity to visit with so many great people across the ag spectrum on a daily basis. Farmers, long-time auctioneers, implement dealers, ag lenders, insurance experts, machinery brokers. Here are a few things I've picked up from talking, mostly listening, to a variety of smart folks over the last week or two.

Some folks call them brokers; others refer to them as jockies; still others know them as scalpers. Whatever the title, these are the guys found in every region of the U.S., Canada and Mexico that make a living buying and selling used farm equipment for a profit.

They've had a tough job the last two years.

Tricky to make a buck when every type of used equipment has been selling so high. My machinery broker friend has seen it all in his decades in the biz. Toward the end of our recent conversation the broker offered an interesting insight. He feels like there are too many $100,000 to $150,000 pieces of used equipment out there right now. He thinks they're beginning to stack up.

"My last purchase was a John Deere 9500 combine for $19,000," the broker told me. "It's nothing fancy, but I bought it on an auction and drove it home. We'll be able to sell it for $25,000 or $26,000."

Last Sunday, October 18th, Piroutek Auction Service of west-central South Dakota had a small farm auction. Dan and Gayla Piroutek are great folks who I've corresponded with for years. They've been most helpful reporting the results of their farm machinery auctions. They run first-rate sales. Along with the prices from last Sunday's auction in an email, they also sent me a note mentioning that more financial stress was beginning to appear. Understandable as we're talking livestock country.

My eyes are glued right now to farm auctions in areas that are heavy in livestock and dairy. In an upcoming issue of Successful Farming magazine I'll have a report showing how values on items, such as used hay balers, hay rakes and hay inverters, have fallen over the past year while values on used grain and tillage equipment have gone up.

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Click on the link to see how equipment sold on that October 18, 2009, farm auction in west-central South Dakota. My latest auction of the week videI is at www.youtube.com/user/machinerypete.

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We have around 600 to 700 agriculture banks that subscribe to our Machinerypete.com Web site - many for 5, 10, 15+ years. It's been fun to get to know many of these dedicated ag lenders over the years. Recently I got a note from one such lender out in central Kansas. He passed along that 2009 looks to be a bin busting year for corn, soybeans and milo in his area. Dryland cotton and sunflowers also looked very good. Elevators, still full with new wheat crop, are preparing to dump grain on the ground.